Cryptocurrency Controversy: LayerZero’s ZRO Token Plummets 20% Amid Proof-of-Donation Backlash

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The cyber universe was recently thrown into a state of chaos as yet another controversy ensued over an airdrop. The focal point of the storm is Omnichain interoperability protocol LayerZero which proudly unveiled its ZRO token by launching an Airdrop for its community. However, a sudden shift occurred and a wave of shock swept over investors as the protocol broke the news of a new ‘Proof-of-Donation’ mechanism. The aftermath was brutal on the token’s price which faced a severe hit, plunging over 20% post-launch.

June 14 was a day marked with anticipation for the LayerZero Foundation. A fervor was stirred within the crypto community as the Foundation teased the upcoming airdrop. Bryan Pellegrino, the influential mastermind behind the operation, disclosed critical information about the airdrop. As CEO of LayerZero Labs, Pellegrino revealed a gigantic ZRO token supply of 1 billion, with 23.8% of these tokens set to be directly handed out to the community.

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The distribution was further broken down. An initial 8.5% of the allocated tokens were planned for dissemination on the first day itself while the remainder would be dispensed over the following 36 months. Anticipatory measures were also adopted to protect the protocol. Announced in May, these anti-Sybil measures focused on the smooth execution of the token distribution, including a self-reporting system for Sybil accounts and a unique bounty hunter program.

However, the protocol’s distribution proposal was met with a mixture of fury and disbelief, causing a stir amongst its users. Complaints arose from contrasting quarters. While some argued that the initial 8.5% distribution was measly, others felt that their allotment was not proportionate to their transaction volumes. Discontentment bred comparisons, with disgruntled voices likening ZRO’s airdrop to zkSync’s version.

LayerZero’s ordeal continued as its freshly announced ‘Proof-of-Donation’ claim mechanism was greeted with intense criticism. The essence of the concept was simple, yet it attracted an avalanche of ire. For each token that user wished to claim, a donation of $0.1 in USDC, USDT, or ETH had to be made. The monetary offerings were to be directed to the Protocol Guild, a financial cooperative for Ethereum developers.

Impressive projections were voiced by the LayerZero Foundation. It calculated the new mechanism to generate an estimated windfall of up to $18.5 million in donations, further sweetening the pot by adding a ‘match all donations’ clause up to an impressive $10 million.

Despite the predictions and the terms of the pledge, LayerZero’s savannah was filled with disgruntled roars. The most vocal of the critiques labelled it as a “Pay to Claim” airdrop. One infuriated user even compared the scenario to a fictional “milking your users” Olympics where LayerZero would undoubtedly clinch the gold. The surprise timing of the announcement and the mandatory nature of the donation were other bones of contention. While some bemoaned it as disingenuous, others went as far as branding it a “tax” more than a donation.

In the face of the heated backlashes, Pellegrino gallantly stood his ground. He refuted the criticisms by retorting that donations were voluntary and not compulsory. Furthermore, he reminded everyone that the tokens were not an entitlement, but an offering, advising disgruntled individuals to simply refrain from making a claim if they chose not to donate.

As the sands of controversy settled, the damage had been dealt. ZRO had suffered the brunt, its value plummeting from $4.79 to $3.39, representing a staggering 22% drop in just four fleeting hours.